If a product is perceived by consumers as homogeneous, which of the following strategies will work to induce brand loyalty?
A. Frequent buyer rebate programs
B. Intensive advertising campaign
C. Price wars with competitors
D. None of the answers are correct.
Answer: A
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For a firm to reduce competitive intensity, it should
a. Enact barrier to entry b. Lobby to the government c. Acquire patents d. All the above
Based on the experience of the Great Depression and the New Deal, which one of the following strategies would be most likely to stimulate recovery from a serious economic recession?
a. increase trade restrictions and tariffs to save jobs and enhance tax revenue b. a reduction in the money supply in order to strengthen the dollar and combat inflation c. keep taxes low in order to stimulate production and minimize the decline in personal and business income d. institute frequent policy changes in order to search for and find the policy combination that would be most effective
If taxes go up and all else remains equal, then consumption should:
a. rise by more than the tax increase. b. rise by the same amount as the tax increase. c. rise by less than the tax increase. d. fall.
In this graph showing welfare effects of a price floor when the government buys the surplus, after a price floor is set, ______.
a. producer surplus increases b. consumer surplus increases c. prices drop d. output rises